Saturday January 7, 2012
Projects, land banks that power PKNS
IN the next five to 10 years, the Selangor State Development Corp (PKNS) will be embarking on several projects, some of which may have some aspects of urban regeneration.
This involves both residential and commercial properties.
In 2010, PKNS had announced several key new developments, namely Datum Jelatek, with a gross development value (GDV) of RM900mil, PJ Sentral Garden City (GDV: RM2.6bil), Sports City (GDV RM1.8bil) and PJ Elevated City (GDV: RM2.2 bil).
These projects are expected to elevate the state to another stage of progress.
“We advise investors to watch out for the launching of the mixed retail, commercial and residential development in Datum Jelatek, comprising four residential towers that will be linked to the Jelatek LRT station, which is four stations away from the Kuala Lumpur city centre,” says PKNS general manager Othman Omar.
He says PKNS's priorities in the coming years include the remaining development in integrated townships namely Bernam Jaya (6,000 acres), Selangor Science Park 2 in Cyberjaya (1,500 acres), Kota Puteri (2,000 acres) and Antara Gapi (900 acres).
“We are introducing parcels for an internationally-acclaimed university hospital, factory outlets, hotels, an international elite golf course and golf academy, a private airpark and related industries, theme parks and a space tourism centre, among others. PKNS is also undertaking a reverse-privatisation' where we now develop land owned by other state agencies, government-linked companies or private land-owners in strategic collaborations,” he says.
The business development division of PKNS has also announced RM14bil worth of new projects at various stages of development. These are mainly developments based on the concept of urban regeneration and redevelopment.
“For lasting growth, these developments need to be supported by the required infrastructure, roads and interchanges for connectivity, public amenities, facilities, schools and the like. Many of these aspects of sustainability must come from the government,” he says, adding that there is a need to brand Malaysian cities in order to attract multinational companies.
Despite having a quickly depleting land bank, it still have parcels of land dotting the whole of Selangor that stretches over 11 townships in nine districts.
In the northern part of Selangor, lie three districts namely Hulu Selangor, Kuala Selangor and Sabak Bernam where PKNS has 6,217 acres, 125 acres and 102 acres respectively. It also have land banks in major townships in Gombak with 994 acres, Petaling (67 acres) and Klang (1,161 acres).
In the eastern side of the state, it has 158 acres in Bandar Baru Bangi and Kajang, while in the south, PKNS has 1,500 acres in Dengkil, Sepang.
Collectively, the total value of these land banks is estimated at over RM4bil.
Although PKNS has several pockets of commercial land in the Klang Valley that is less than 10 acres, these parcels have a potentially higher GDV as they are in more strategic locations like Petaling Jaya, Kelana Jaya, Shah Alam, Bangi, Kota Damansara, Ampang Ulu Kelang and Sg Buloh.
“Most of our strategic townships are fully developed and a major part of our strategic land banks has been depleted. As a result, the biggest chunks of our land banks are presently outside the Klang Valley. To overcome these challenges, we have been transforming dilapidated brownfield areas like our old flats and industrial areas built 30 years ago into vibrant and sustainable integrated mixed developments,” he says.
PKNS has identified at least 10 new sites for urban regeneration and at least five new strategically located parcels belongong to private and state government agencies for reverse privatisation and joint ventures.
Besides getting busy with its own projects, PKNS has also undertaken the development of several abandoned projects. This includes Bukit Botak which involves 1,422 units of semi-detached houses originally undertaken by Delpuri Corp Sdn Bhd.
“Not only did we finance the RM140mil project but we also subsidised RM79mil in order to price the units at RM99,000 each whereas the cost and market value is at RM180,000 and RM200,000 per unit respectively,” he says, adding that for the record, PKNS has never abandoned its own projects.
Transparency in choosing partners
Despite the impression that government-linked agencies are inefficient and lacks transparency, PKNS is leading the way to be more transparent in its dealings with private developers.
“We have enjoyed very good returns from these investments in terms of dividends and scheduled payments. With our good reputation as a partner, strategic land bank and transparent approach towards our selection method, we have been able to attract the best offers in our request for proposals (RFPs). Our latest RFP for Kelana Jaya Sports City where over 40 companies participated, the best offer was a guaranteed return of RM422mil to PKNS inclusive of the performing arts centre and stadium,” he says.
Melati Ehsan Bhd emerges as the winner after three rounds of assessment of 40 companies comprising local established companies and also one Chinese company.
“Our panel of independent committee comprising accountants, financial advisors and architects took over a year to evaluate the proposal. Melati Ehsan got it because of merit,” he says.
Recently, the application for redevelopment of the PKNS field and sports complex in Kelana Jaya was turned down at a public hearing due to technical non-compliance.
“We are going to take our time to re-assess the project and make the right amendments to the project and will accommodate the comments that was made during the public hearing,” he says.
He says the project is not going to be just any profit-driven project, but will be a new Green Building Index landmark and branding project for Kelana Jaya.
“Whatever the proposal, we will have 70% of the original land being kept in various levels as open space, and these are the good points that people should see. The project will have fields and complexes that house the podium and facilities like the sports complex, performing arts centre, traditional game field and an open-area landscape,” he says.
He says the complex has never been opened to public before but only for PKNS functions, but with the said project, the facilities will be available to the public.
“Its up to our board to decide, bearing in mind that PKNS has an obligation to the five million Selangorians,” he says.